Building a target capital structure is one of the most important decisions in corporate financial management. The purpose of this article is to identify the determinants of capital structure and adjustment mechanism toward the target leverage. The partial adjustment model was applied on a sample of 306 non-financial companies listed on Vietnam stock exchange market during the period of 2008-2017. By the fixed effect model estimation method, the research results have discovered the factors of growth opportunities, firm size, tangible fixed assets and firm’s unique characteristics have a positive effect on the target capital structure of enterprises. Besides, profitability and dividend payment have a negative effect on the target capital structure of enterprises. Accordingly, the research results show that the average adjustment speed toward target leverage of the firms is 90.03%. Research results also demonstrate firms have higher or lower debt ratio than the target debt ratio, capital surplus or capital deficit also have an impact on the adjustment rate toward the target capital structure. The research results are consistent with the Dynamic Trade-off Theory. From this result, this article has provided policy implications for non-financial companies listed on Vietnam’s stock market in building a reasonable target capital structure according to operating timeline to maximize enterprise value.

Abstract
1. Introduction
2. Literature Review
3. Methodology
    3.1. Determinants of Target Capital S
    3.2. Partial Adjustment Model for Capital Structure
    3.3. Model for Target Capital StructureAdjustment in Case of Higher or LowerLeverage Than Target
    3.4. Model for Target Capital Structure Adjustmentin Case of Capital Surplus or Deficit
    3.5. Model for Target Capital Structure AdjustmentWhen Enterprises Deviate from the TargetCapital Structure with Capital Surplus orDeficit
    3.6. Estimation Methods
4. Data and Sample Collection
5. Empirical Results
    5.1. Descriptive Statistics
    5.2. Correlation Analysis between Variables
    5.3. Regression Results
6. Conclusion and Implication
References

• Cuong Thanh NGUYEN(Faculty of Accounting and Finance, Nha Trang University) Corresponding Author.
• Cuong Manh BUI(Faculty of Accounting and Finance, Nha Trang University)
• Tuan Dinh PHAM(Faculty of Accounting and Finance, Nha Trang University)